Curious Cat Investment Books - Arthur Levitt

In Take on the Street, Arthur Levitt paints a picture of what investors face in trying to compete with the insiders. Warren Buffett said: "During my lifetime, the small investor has never had a better friend than former SEC chairman Arthur Levitt. His goal was unwavering: to have markets that served the interests of investors, both large and small." The book provides insight into the working of wall street and into how special interest lobby congress to maintain advantages they have.

Take on the Street is most valuable for the learning and serious investors. Much of the advice focused on fairly standard focus on long term, investing, searching for investments with low fees, taking advantage of compounding returns over time.

The information which is likely to be new, for most experienced investors, is the insight into how special interests lobby congress to maintain their special privileges. He provides examples of warning signs that lead to the market excesses and how special interests lobbied Congress to protect their interests. The book also explains the importance of issues he pushed to address as SEC chairman such as ending the practice of companies providing unpublic, significant inside information to Wall Street firms; independent corporate boards and independent auditors.

An example he provides on page 277 illustrates the power of compounding over time: "Suppose you start saving $2,000 a year at age twenty-five. Assuming a 10 percent annual return, you would have $974,384 at age sixty-five. Only $80,000 of that would come from your $2,000 per year contribution. The, rest $894,384, comes from the compounded return on your investment.
But for every year you delay, the amount of your nest egg drops precipitously. For example, if you don't begin saving $2,00 a year until you reach age thirty-five instead of age twenty-five, your nest egg will amount to just $363,887!"
He provides links to a number of excellent web resources including: CalPERS Shareowner Forum, The Corporate Library, Executive Paywatch, American Savings Education Council, SEC and TIAA-CREF.